Outlook for Friday, July 18, 2014
The Dow Jones Industrial Average had one of its worst days in
the last couple of months yesterday, just 24 hours after closing
at the best level ever. Two geopolitical events opened investors'
eyes and sent a panic through the markets. First came the downed
Malaysian Airlines plane, supposedly blown up by Russian rebels.
Then just before the closing bell markets learned that the
Israeli army invaded Gaza in a ground assault. The news meant
stocks continued their nosedive to close at the lows of the
Even though the geopolitical situation feels dire, these times
are often buying opportunities for investors if the conflicts are
quickly resolved. The U.S. markets are poised for a bounce this
morning after solid earnings from General Electric (NYSE:
) and a few other important names.
3 ETFs Being Driven By Russia, Time Warner
Market Vectors Russia ETF (NYSE:
stock market is working on a seven-day losing streak, but the RSX
is set to open higher this morning after losing 7.2 percent
The situation in the Ukraine is fluid, but all roads seem to
be leading to a Russian missile taking down the plane. The
conflict could escalate as the rest of the world increases
sanctions or even makes a bolder move and starts to arm the
Ukraine army. Investors need to realize that even though the
Russian stock market is very cheap, the reason it trades at such
low multiples is because of the unrest in the region.
iShares Barclays 20+ Year Treasury Bond ETF (NYSE:
One of the few bright spots in yesterday's sell off was the
bond ETFs. TLT closed up the session with a gain of 1.26 percent
to finish at the best level in 13 months.
Investors were selling equities first and asking questions
later. The money was going into the safest asset class they knew:
U.S. bonds. The 10-year Treasury rallied to is biggest gain since
February as the yield fell to 2.47 percent.
It would be surprising to see this bond market rally continue
unless there is more negative news out of Gaza or the Ukraine.
However, investors should be aware of the situation.
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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